Friday, September 3, 2010

Market Weakness and 529s

Many of our posts focus on the investment markets, the economy, and global events, however these are usually issues we and our client's cannot control or predict consistently.  This is part of the reason being proactive about one's planning is so valuable- doing the things we can control (and doing them correctly) is critical to long-term success. 

An area with growing importance is 529 accounts and general college planning.  As costs skyrocket and advanced education becomes more critical to future careers, the 529 can be one of the most powerful (and important) accounts on a young families balance sheet (or for grandparents saving for grandchildren).  When investment markets are low and assets are potentially underpriced, a contribution of cash to a 529 is very opportunistic.  The primary reason?  Future earnings are tax-free to the extent they're used for college education expenses. 

We can't control what the market does day to day, but we can identify the opportunities it presents and take advantage of them.